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7th May 2004 - In the United States, as companies focus
on lower costs and improving efficiencies, more and
more are looking at reducing expenses by consolidating
their telecommunications expenditures and negotiating
contracts with wireless carriers that allow the businesses
to take advantage of their corporate buying power. As
expected, the larger the company size, the greater their
ability to negotiate contracts that are most advantageous.
However, according to In-Stat/MDR (http://www.instat.com),
even small companies have the ability improve their
purchasing power through careful research and by concentrating
their telecommunications purchases.
In recent years carriers have begun to focus more attention
on winning and keeping business customers. And this
focus has not been restricted to the largest enterprise
accounts, as nearly all carriers have business sales
strategies that are targeted at various sizes of businesses
and at specific vertical markets. The high-tech market
research firm finds that a valuable opportunity exists
for carriers to increase the use of preferred carrier
status specifically among small companies in the 5 to
99-employee range. While there is less incentive for
carriers to extend the same plan to very small companies
(less than 5 employees), they should embrace efforts
to develop and increase awareness of plans that would
extend advantageous rates to the Small Office/Home Office
(SOHO) market, particularly given the number of SOHOs
in the US.
In recent surveys, In-Stat/MDR questioned corporate
users of wireless services to determine how they purchased
these services. The results of these surveys show an
increasing level of sophistication in how companies
purchase their wireless telecommunications services.
They show that:
- Size of business is a strong indicator of whether
a company will purchase wireless services from a preferred
provider.
- Nearly all companies are aware of preferred provider
programs and know how they work, but a significant
proportion do not yet have a preferred provider. However,
only 7% of companies surveyed said they did not have,
and did not plan to get a preferred provider.
- One in five survey respondents whose companies didn't
use preferred providers said that it was too difficult
to set up a preferred provider program.
- SOHO employers were both more likely to pay 100%
of their employees' wireless bills, and are also to
pay less than 10% of their wireless bill.
- Overall, more than one in three companies pay none
of their employees' wireless bills - and 2 out of
three companies pay some proportion of their employees
wireless bills.
This Market Alert is drawn from the In-Stat/MDR report,
"Corporate
Wireless Contracts & Procurement Practices",
which details corporate wireless contract buying behavior,
with corporate buyers segmented by size of business,
from SOHO, small, medium, and large businesses.
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